The repository of one hard-boiled egg from the south suburbs of Milwaukee, Wisconsin (and the occassional guest-blogger). The ramblings within may or may not offend, shock and awe you, but they are what I (or my guest-bloggers) think.

Pinky And The Brain

Yesterday I wrote on Geithner’s new Public Private Partnership Investment Program. It seemed to me that for having missed 3 self imposed deadlines and allowing the markets to roil each time he did, his final plan was woefully lacking in complexity or uniqueness so as to explain why it took Geithner so long to spit it out. I think most able minded individuals could have come up with a version of “Just another bailout” in far shorter time.

The question I was left with after reviewing the PPPIP was “what has Geithner been doing?” Now we know.

This morning, Geithner and President Obama have unveiled a new initiative they are taking to congress. They now believe that a big reason why the economy is in the trouble it is is that large financial companies didn’t have anyone to tell them “no.” They reason that if someone had been able to tell them “no,” then the companies would have been compliant and we all would be living in financial Nirvana today.

Not feeling like they’ve socialized the financial industry enough, Obama and Geithner will be asking Congress for the ability to:

initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy.

Admittedly, some additional oversight seems to be warranted after what we’ve experienced. In my mind, a big piece of the oversight and change in regulations should be focused on the rating agencies who continually priced assets as if they were gold and diamonds when in fact they knew they were more like iron ore and copper…still valuable but at a significantly diminished value. However, as Obama has done on nearly every change he’s implemented, he’s not satisfied with “improvement.” Obama’s view of change is only satisfied with a complete takeover and control of whatever the issue is he’s focused on.

In defense of their request, Geithner and the administration state:

According to the administration officials, the government could have been better equipped to deal with AIG aggressively before it engaged in behavior that was so risky, its failure threatened to bring down the entire financial system with it.

“Before it engaged?” That doesn’t sound like a company in collapse. That sounds like further dictation of what an industry can or can’t do. Yeah, that’s working out so well for all the GSE or GSE like enterprises. Let’s just look at Fannie, Freddie, Amtrak, US post office etc. Can you find one in these or others where the government is involved “before they engage in behavior that is risky,” that operates for a purpose other than lobbying Congress for it’s future life blood?

I think it’s now safe to say that Geithner did not spend the last two months putting together his PPPIP. Rather, at the direction of Obama, he has been working on a plan and talking points that makes another industry servants to the dictates of their new government masters. In another time, this may have passed for absurd. Now, it’s just more of business as usual. It looks like for the past two months, rather than finding solutions to the issues immediately in front of us, Pinky and The Brain have spent their time doing “The same thing they do every night, Pinky—try to take over the world.“